Solid Third Quarter Has Intel So Giddy, It Praises AMD

Intel seems to be taking all the talk about ARM chips in PCs rather personally, to the point where the chip giant actually said nice things about fellow x86er Advanced Micro Devices on its earnings call.

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Hold the phonefor the first time in the history of forever, Intel not only acknowledged Advanced Micro Devices' existence, but actually praised its smaller rival's value proposition for low-end PC hardware. What sign of the Apocalypse is this again?

The context: Intel on Tuesday reported record revenue and profits for its fiscal third quarter, but sales of the company's low-power Atom processors were down 32 percent year-over-year and have slipped considerably from the heyday of the netbook a few years ago. That prompted a question from an analyst about the challenge Intel faces from makers of ARM processors, to which Intel CFO Stacy Smith appeared to take umbrage.

"I hear this argument a lot about ARM coming into the PC segment of the market," Smith said. "That they're going to come into the low-end of the market with a $30 processor to compete with our $100 processor and then they win.

"But we have $30 processors, full kits in fact, that we make a nice profit on. And AMD has a $20 kit."

Intel's chips still don't have much of a presence in a mobile device market dominated by the ARM architecture. Given the inroads some think ARM is making in Intel's bread-and-butter PC territory, perhaps the chip giant belatedly recognizes an x86 brother-in-arms in AMD.

Not that Intel and AMD are going to be BFFs anytime soon, of course. As per usual, Intel reiterated its pledge to rule over all things PC, against all comers, AMD very much included.

The chip giant also said it will have Intel-based smartphones by the first half of 2012. The thing is, Intel's been saying that for an awfully long time and CEO Paul Otellini conceded that the company has to put its money where its mouth is on that front before people take Intel smartphones seriously.

"At the end of the day, in these markets, transistors are going to be a defining point of differentiation," he said. "We're operating at 22 [nanometer process technology] and have great line of sight to 16 (nanometers).

"But the proof is in the pudding. And you're just going to have to wait until we bring a smartphone on stage and a tablet on stage and run it through its paces before you're convinced."

Otellini maintained that Intel's long-term process technology advantages over competitors would pay off over time in the mobile market.

"As computing problems become more complex, both the Intel architecture and the ARM architecture face the same fundamental physics problems," he said. "More transistors are needed. So the leading edge processor technology becomes more and more complex and leads to more differentiation. We're solving these problems a generation ahead of everyone else."

Earlier in the call, Smith also name-checked AMD when addressing processor market share for the just-concluded quarter, though this time he wasn't so charitableIntel claims it picked up between $50 million to $100 million in revenue share from AMD towards the end of the third quarter.

Still, it seems like the last time Intel execs discussed the company's long-time archenemy this much was back when Intel was handing over $1.25 billion to AMD to settle a bunch of anti-trust lawsuits. The last time Intel talked up AMD this much in a non-legal context was probably back when AMD's K7 architecture was kicking butt and taking names.

As one AMD insider contacted by PCMag quipped, "That was the most air time we have had on an Intel earnings call in a long time."

Damon Poeter got his start in journalism working for the English-language daily newspaper The Nation in Bangkok, Thailand. He covered everything from local news to sports and entertainment before settling on technology in the mid-2000s. Prior to joining PCMag, Damon worked at CRN and the Gilroy Dispatch. He has also written for the San Francisco Chronicle and Japan Times, among other newspapers and periodicals.
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